Developer Margaret Freund's gleaming project is set to rise in a dingy corner of Shockoe Bottom  and she says more changes are coming.

In a little more than a year's time this vision will be solid, she says. This week, construction beginning on Canal Crossing, a two-building, 108,000-square-foot, office, retail and entertainment center. City officials say it's the transformation of the last large industrial operation in Shockoe Bottom, other than the Alcoa aluminum plant.

Freund, a Richmond native and developer for 15 years, is confident city dwellers will get excited about Canal Crossing. It's not hard to inspire interest in new restaurants, new hangouts and new shops, after all. But hyping a project like this one is "kind of a double-edged thing," she says, "because people don't know how long it takes."

Richmonders hear an announcement that something's arising in Shockoe Bottom, or along the Canal Walk, and wait eagerly for the bulldozers, cranes and new tenants to roll in, Freund observes. When nothing happens right away, people grumble.

In fact, Freund says, there's an enormous amount of activity simmering in the area. Take the recent public trumpeting of the $250 million Village of Rocketts Landing proposal  the idea had been discussed for two years and yet few had even heard about it. Freund herself has multiple projects going on in the area  the Lady Byrd Hat Co. building on the canal and at least one more she won't name. "None of us like to talk about these things before they're locked up," she says. Freund predicts that the next 12 months will bring a flurry of announcements for projects large and small, the fruits of years of quiet planning.

It took two years to work out a development plan for Canal Crossing, which is superspeed for any project of that magnitude, Freund says.

First come the negotiations with the owner. Then there's finding an architect, which was simple in this case, she says. Richmond's oldest and largest architectural firm, Baskervill & Son, jumped at the chance to redesign a structure it built decades ago and then move in as the anchor tenant. The overhaul of the building will cost $9 million to $10 million.

Then comes the delicate task of persuading tenants to sign leases. Most big downtown projects, particularly on the riverfront, are multi-tenant buildings, says James J. McCarthy Jr., executive director of the Richmond Riverfront Development Corporation. "You've got to pre-lease better than half the building before a lender will give you a long-term commitment," he says  not an easy task, when each potential tenant has its own demands for space, parking and design.

In short, finding tenants for a building like Canal Crossing is like a tough game of Tetris. Every unwieldy element must fit neatly together while the clock keeps ticking. Of course, in the game of development, potential tenants don't fall neatly from the sky.

For the Lady Byrd Hat Co. building, which is now vacant, McCarthy says Freund "frankly chased tenants, other [restaurants] that ended up in other places in the Slip that she competed for." He refers to the Morton's of Chicago steakhouse chain, which Freund pursued for five months before the company chose to move into the new building at the Turning Basin instead.

Filling Lady Byrd, the historic factory building that squats heavily on the side of the canal near 14th Street, will be a unique challenge for Freund, McCarthy says. "She feels the most important tenant that she can get is a really high-end restaurant entertainment use, unique in the region"  i.e. a showcase musical venue. Freund will have to find that mysterious tenant before smaller tenants are obtained, he explains, so as not to "prejudice how you're going to chop up the building before you have that anchor in place."

Freund knows this all too well. And the site's prominence makes success essential, she says: "Lady Byrd is the cornerstone. It's kind of a little crown jewel down there." Just don't ask her what possible tenant she's negotiating with at the moment. Freund is a "very candid person," McCarthy says, but she's none too fond of nosiness. In the past she has shunned the media; a search for her name in the Richmond Times-Dispatch archives turns up virtually nothing.

One success for Canal Crossing Freund will talk about is the restaurant/bar chain Buffalo Wild Wings, which has signed a lease to move into a 7,000-square-foot space in late 2003. Retail will be the toughest to lure, Freund says. "They're sheep. They're followers. No one wants to be the first." But "as soon as the first one comes," she says, "it'll be an avalanche."

You could say the same about what's happened in the whole of Shockoe Bottom. In the early 1990s, Freund looked at an old warehouse on a small triangle of land on Dock Street and envisioned Bottoms Up Pizza. People told her she was crazy  a restaurant under the highway and railroad tracks, in the middle of nowhere, when the Floodwall had not yet risen? "That area was a disaster area," McCarthy recalls with a chuckle. The building didn't even have a front door.

Freund went ahead anyway and built Bottoms Up. It's now considered a pioneer in the Bottom, luring lively crowds seven nights a week with music and fragrant pizza.

Freund has been involved in several other landmarks nearby, such as the night spot The Flood Zone, now the site of Have a Nice Day Cafe, and the jazz club Medley's. "I'm a bit of a freak for this area," she confesses.

What signals that a shabby structure can be reborn as a trendy destination? Activity, action and energy, Freund says. People are drawn to intersections, like Bottoms Up, where there's a bustle of trains, cars and people. Also, she adds, there's a sense of adventure for those traveling through narrow streets and old, mysterious buildings in former industrial areas like the Bottom. "People feel like they're discovering it," she says.

Freund's development company, Fulton Hill Properties, specializes in reinventing old buildings into modern facilities while keeping their historic appearance. The boxy building to become Canal Crossing was built in 1916 as a grocery storage warehouse. In 1948, Philip Morris commissioned the adjacent long, low structure for a tobacco warehouse. Until recently, Hawkeye Manufacturing Inc. fabricated hot tubs in the building.

"It's fairly ugly today," Freund says freely. "So when we get done with it, the transformation's going to be stunning."

The dingy yellow, steel fa‡ade will be ripped off and replaced with a new skin of stainless steel. On the Cary Street side, awnings left from the building's tobacco-drying days will be remade with sheets of perforated steel, so sunlight will stream in during the day, and at night the place will be illuminated from within like a punched-tin lantern. "You can imagine with the light coming through it, how cool it's going to look at night," says Freund, holding a piece of the rippled steel up to a desk lamp. She envisions the music, the lively crowds, the spots of light on the sidewalk. "People are going to say, 'What's that over there?'" And, she hopes, they'll walk on in.